\ I gave you the direct quote right off the FAQ that was referred to earlier. What I may respectfully say is that you are not reading/understanding properly. C2 has to register. Their CUSTOMERS (who allow auto trading to happen in their own personal account) obviously do not register. Further, it seems that some of C2 customers are offering similar services to other people? If so, then the same rule applies. If a customer of C2 has his own customers and for them he trades or auto-trades the account for members of the public at large, he would then register. Regester not because he is a customer of C2, but register because he is trading other people's money. Or if I am misreading your statements myself and you mean literally "They allow users to autotrade systems from publishers who ARE NOT registered." again, so what? it is the so called "publisher" who makes the decision to register of not. That's his concern and is between him and the SEC and the State regulatory bodies. It is not legally "your concern" per se. It's a "free country" and you can pay with your own money for services from unlicensed and unregistered people all day long if you like. In any event, the C2 FAQ page was clear as day on the matter. Or could you post the actual text (and provide the link) for what it is that is in dispute here?
only - what Qin is saying (and I agree) is that if you have a newsletter/subscription service (such as C2) that is trading in stocks or options (under the SEC umbrella) and you allow your reco's to be auto-traded, the newsletter/subscription owner must be registered with the SEC. In the case of C2, very few (if any) of the subscription providers are registered with the SEC. Therefore, if you have a subscription service that can be auto-traded (exactly what is taking place at C2) you must be registered. If you are not registered, you are violating the rules set forth by the SEC. You are awfully defensive for a brand new poster to ET. What happened? Did someone over at C2 tip you off to the discussion here and now you need to pull out all the stops to defend them? Is this Mr. Klein by chance? It's a little different when the discussion is not on your forum... interesting...
qin - It would be interesting to get an official statement from the SEC on their view of C2. That would put the issue to rest rather quickly (and possibly shut down C2 as well). If that was my business, I would go to all lengths to discourage anyone from considering going that route... Anything.
Here's the C2 thread in which this was extensively discussed: http://www.collective2.com/cgi-perl/board.mpl?want=listmsgs&boardid=9323885&threadhilite=1838
thanks for the link. i'm surprised Matthew has now bothered to contact SEC to clarify about this so he can put this matter to rest
qin - could be that this person has a vested interest in trying to prove you wrong. This person just signed up TODAY and has ONLY posted in this thread and one other. This person obviously needs to try to squash any possible concerns or possible discussions resulting in the contacting of the SEC....
At worst, C2 might have to discontinue providing autotrading functionality, not discontinue offering advisories. This probably borders on the Napster controversy. Napster didn't upload illegally copyrighted material, but they were the method it happened. Collective2 itself is not an investment advisory, it is the connection machinery that links advisories with customers. The actual knock is mostly on those who choose to provide services that can be autotraded, yet not register as advisors. Autotrading is just one facet, it is not necessary to use these services. If this issue became a hot issue, Collective2 could still proceed by dropping its autotrading functionality, although that might crimp the business model. But on the other hand, every autotrading broker would be under the same microscope...
I never heard of C2 or of autotrading before today, but I did write a newsletter back in the 90's and feel a little familiar with SEC registration rules in that regard. What do you mean by "allow your recommendation to be auto-traded"? If you mean C2 makes stock recommendations and for a fee C2 will wire the buys and sells to a subscriber's broker for execution in the subscriber's account, then that is subject to SEC registration. But if by allow you mean C2 has no objections if a subscriber places trades based on C2 recomendations by actively making a decision on his own, after reading the recomendation, and then electively executing or activating some software to "auto trader" what the customer says to do. so what? If allow is something else like maybe that C2 sends recommendation electronically to the customer's computer??? and then the customer has the ability to turn on his computer software to automatically read the email and to automatically execute every trade that is recommended?? Or some other hybrid, then maybe I see why there's a debate I'd be interested if someone might breifly clarify what the autotrading is.